Welcome to my portfolio deep dive for spring of 2023! In this post, I do a deep dive into our investment accounts and share all the different ETFs we invest in. If you’re interested, you can check out some of my previous portfolio deep dives:
Our Investment Strategy
In my last portfolio deep dive, I summarized our investing strategy as follows:
My wife and I both prefer to invest using ETFs. For us, ETF investing provides inexpensive, low-cost diversification and market-average returns. Also, with ETF investing, it’s just so much easier to get invested, manage your accounts, and stay invested.
Why is it easier to stay invested? Well, that’s because ETF investing is boring.
Since we don’t hold individual stocks, we never check the news looking for anything that could impact our investments. We don’t research company fundamentals, and we don’t stress about business models our future outlooks. And except when making a purchase (or writing a blog post), we essentially never check how our holdings are doing.
Instead, we allocate that mental and emotional bandwidth to other areas of our life, which has served us well.
This summary certainly still rings true today. By keeping things on “autopilot” as much as possible, we’ve been able to focus on other areas of life that bring us more happiness or are simply more productive uses of time.
With that said, let’s dive in and review each of our investment accounts!
In 2021, I set a goal to maximize my wife and I’s TFSA accounts which we finally achieved in October of last year. Here’s what it took to achieve that goal. Note that I started 2020 with only $3,500 in my TFSA.
As you can see, I made consistent contributions to my TFSA for quite a long time—even before I started AnotherLoonie in June of 2021. Each month I tried to contribute $2,000. And in other months, I was able to take advantage of extra income I received, tax refunds, or excess savings to maximize it even quicker.
For this whole period, my TFSA holdings have been the same. I hold four tickers in my TFSA, including VCN, VIU, VEE and VUN. These are my “core four” and give me inexpensive diversification across the globe.
When starting AnotherLoonie I had $12,400 in my RRSP. Previously I had more, but I liquidated much of my RRSP to come up with the downpayment on our home.
Since I was focused on our TFSAs through 2021 and during most of 2022, I hadn’t contributed to my RRSP with any consistency. That has changed recently, with my current investing goal being to maximize my RRSP in 2023.
In my RRSP, I try to follow my “core four” portfolio, which includes VCN, VIU, VEE and VUN. The only difference is that I have some VTI that I purchased back when I had some excess USD sitting in my bank account.
I don’t plan on buying any more VTI in the near future. It’s too much of a hassle to convert from CAD to USD to make a purchase. Instead, I like to buy VUN more consistently and in smaller amounts that make converting to USD less worth it.
My wife started 2021 with quite a bit more money in her TFSA (about $17,000) thanks to having some leftover cash after buying our house. Since then, she’s been a consistent contributor and maximized it at the same time I maximized my TFSA last year.
At first, it was tough to get my wife excited about investing and saving for retirement. To help spark her interest, I encouraged her to pick some ETFs she was interested in. She ended up finding two great dividend ETFs that pay her monthly dividends: the iShares Core MSCI Canadian Quality Dividend Index ETF (XDIV) and the iShares Core MSCI Global Quality Dividend Index ETF (XDG).
Since then, she has added VCN (one of my “core four”) and XAW (the iShares Core MSCI All Country World ex Canada Index ETF) for some added diversification. Although there’s some duplication with these ETFs, she’s happy with her portfolio, and the sizable dividends she receives keeps her excited to invest.
My wife only opened an RRSP recently. After I received an unanticipated windfall last year, it made sense for her to open an RRSP so we could deploy some of our cash and receive a larger tax refund. Since then, she has made some modest contributions to this account.
In 2023 she doesn’t plan on contributing very much to her RRSP. Instead, she might help me maximize my RRSP by covering more of our household expenses or mortgage with her income.
Unlike our other registered accounts, her RRSP portfolio is very simple. She only holds XEQT (the iShares Core Equity ETF Portfolio). Currently, she has $25,300 in XEQT and is quite happy with its quarterly dividend.
Each of the above big contributions were composed of $5,000 in Tangerine LOC debt and $3,500 in margin debt. As of today, I hold $40,900 in VEQT and no other assets in this account. And yes, that means I’m down about $3,400 in this account (excluding dividends).
Each of the above big contributions were composed of $5,000 in Tangerine LOC debt, and $3,500 in margin debt. As of today, I hold $40,900 in VEQT and no other assets in this account.
I don’t plan on contributing any more to this account until after my RRSP is maximized. And even then, I may prioritize my Smith Maneuver account and paying down my mortgage over taking on more margin debt.
Smith Maneuver Account
I started this other account at Interactive Brokers after receiving a large home equity line of credit last spring. Like my margin account, I planned to purchase VEQT using debt—this time, financed by my new HELOC.
My sole investment in this account is VEQT which is worth $64,700.
As you may know, my leveraged investing strategy hasn’t been all sunshine and roses. Recently I shared how my investment loans were costing me more than $500 per month.
I shared the details of my portfolio assets and debt in my recent year-end review. But in brief, as of my March net worth update, we hold $422,200 in ETF investments. $320,300 of these investments are owned outright, with the remaining $101,900 financed by investment loans.
In reviewing our total portfolio allocations, we are pretty close to VEQT, which holds 30% Canadian, 41% U.S., 21% international developed, and 8% in emerging markets assets.
Where we diverge is in our Canadian holdings. I’ve always thought investing 30% of your portfolio in Canada was too much, given we’re such a small economy and we only have a few major industries. So instead, we target around 20% Canadian and invest the leftovers in U.S., international developed, and emerging markets.
Looking ahead, I’ll try to keep these allocations consistent as we continue to make more contributions to our portfolio. I check my balance every time I contribute and purchase ETFs accordingly.
Thanks for Reading!
Thank you for checking out my latest portfolio deep dive. I hope you found this very interesting and can compare our strategy with your own. Do let me know what you think about our ETF investing strategy in the comments below.
I recently wrote a few articles that you may be interested in. This includes my guide comparing the TFSA to RRSP and my choice for the best dividend ETF in Canada. Consider giving those a read if you think they’ll help you on your financial journey!
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